All Forum Posts by: Robert Leonard

@Amy Verges nailed it. It's always a good time to buy, when you buy right!

Welcome to BP @Casie Nicholson. See you around BP and BR too!  ;-)

Hello and welcome to BP @Derrick Reeves! You can find the Baton Rouge REIA, better known as "The RING" on the meetup website. I would share a link, but they don't like links here. So if you put the meetup website with a forward slash and the-ring you will find the group. It's very well organized and there are a lot of active investors there every month.

Meetings are usually on the 2nd Tuesday of the month at 6:30 PM at the Hyatt on Bluebonnet. See you soon!

Sure thing. It will make good discussion. Our next meeting is coming up in a couple of weeks.  Keep your eye out for the announcement.

Hi Katie, I've seen some of your recent posts on the Baton Rouge REIA/THE RING meetup site.

My recommendation is that you take your time and focus on learning some of the strategies before making any drastic changes like selling and starting over.  There are a lot of factors that make the time and process of selling advantageous or not. Namely the tax consequences can be significant.  Deciding what’s the right next move and when, will depend largely on the rest of your personal financial picture.  Only your personal tax and estate advisors know your situation well enough to offer meaningful advice on these matters.

Bryan, have you heard the expression, all real estate is local?  I'm not saying that to discredit the previous comments, because they are sharing good information.  Here "in south Louisiana" your best bet to narrow your search criteria for your first flip is to pay attention to two numbers.  Property values and average days on market (DOM) for sold comps in that price range.

What property values? That's determined by your resources.  How much cash or credit do you have available? What can you afford or are you willing to risk to pursue a flip?  I don't mean for you to answer those questions here, but answer them for yourself to figure this out.

Based on the answer to that question, where do properties sell in a time frame that will fit your investment objective? If you are buying with hard money, do you want to try to flip in an area where the average DOM is 120+? An HML probably wouldn't lend in such an area. You can let the market data tell you where to look and what properties to spend time analyzing when you figure out your financial criteria.

Something else that helps is to decide on your "easy no" areas.  In cities with multiple zip codes, you might ask, where is the most crime?  I'm not going to waste any time looking at anything that comes up in that zip code no matter what the price, if I want to flip.  There are a lot of different crime stats, but pick a category like violent crimes that you can compare across the board.

Once you've done some homework to find out what you can on your own, then contact an agent to help you narrow down your criteria based on DOM.  The school zone rating sites are of limited value in the places you mentioned. The property values and DOM will tell you where properties will sell quickly.  

After all of that, then you have to figure out how you can find such a "hidden gem" because there are a lot of other people hunting for those right now!

Hello @Christopher Oncale and welcome to BP.  Sounds like you have an interesting deal on your hands! Congratulations on getting started.

Welcome back @Katie Andrews.  You have some good questions.

1) I manage my own properties.  IMO, if you are buying a handful of high quality properties, it will be pretty easy to learn the basics of PM that you need to know to make managing a small portfolio a breeze.  There is a level of peace of mind that comes with knowing who you give possession of your properties to, that I personally put a high value on. I'm not trying to twist your arm or anything, but high quality properties are not the PM headache that a lot of people cry about.

2) Generally, I would say somewhere in a range of 10-20% of your investment capital should be held as a cash reserve.  That is a matter of your risk tolerance and is a good question to ask your lender if you use leverage. If you have other retirement income, I would be real conservative and use a minimal amount of debt if any.

3) The number of properties you buy will depend on what city you are in and whether or not you use leverage? For example, you may want to create $4,000/month of income with your nest egg?  How many properties would it take to create that much income? I lean toward "less is more."

4) I recommend you look into note investing. There is a different level of liability risk involved in note investing vs ownership of properties.  There's no PM involved in note investing either.  We have an over-employment problem here in this state. When you see that about 70-80% of the billboards are plastered with people pushing people to sue somebody, you'll know what I mean by that.  Asset protection becomes a major concern if you own a bunch of free and clear properties here.

You sound like you've recently dealt with some estate matters, but the question of your heirs and their ownership interest in any of your assets come to mind as a concern.  This works differently most places from here, because we have forced heirship.

Another concern is what will be the tax consequences of the sale of your condo?  What portion of the $500k is capital gain (or exempt from gains if this was your personal residence)? How much is subject to recapture rates of tax because you depreciated over the years? Should you do a 1031 Tax Deferred Exchange to be able to reinvest all of your gain?  There are rules about reinvesting your gains that will be factors in how much cash you can keep without reinvesting it, if you do the exchange?

Last, I'll say, be careful. A person with cash to invest doesn't have anybody to save them from themselves!  I've seen and heard of a lot of mistakes cash buyers made that bank underwriters would have prevented.

Welcome to BP @Susan Foreman. Richard at Geaux Home Inspections does a great job on my SFR inspections.

Welcome to BP @A Blanchard! If you use the term "assignment" instead of "wholesaling" when you talk to title companies, they will be more familiar with what you are looking to do.